What’s in a Name: Sometimes it can be the Difference for Needed District Capital Improvements

As the attention of District Administrators and Business Managers turn to the process of final budget adoption, creative funding options, at times, must be considered. In the case of much needed capital improvements, many Districts are exploring the option of naming rights to publicly visible District facilities to attract donations from individual benefactors and corporate sponsors.

The School Code does not specifically address naming rights issues. However, general authorization for naming rights agreements can be found in School Code Section 502 which authorizes the School Board to establish, equip, furnish and maintain its schools and recreation facilities, Section 508 regarding entering into contracts of any kind and Section 511 which provides for financing of school programs and raising and disbursing funds for such purposes. If your District is considering the option of naming rights, it is strongly recommended that your District adopt a Board Policy which contains the criteria regarding the naming of school facilities. First Amendment issues regarding government speech, commercial speech and schoolhouse speech are all implicated in school naming rights cases. Acting outside of an established policy framework exposes school boards to First Amendment challenges and simultaneously takes away their best defenses. The Board Policy should include guidelines and criteria for corporate sponsors and guidelines for the naming of facilities or components of facilities after notable individuals. Once the Board Policy is in place, the Request for Proposal (RFP) criteria should mirror the Policy terms. Key criteria to consider for inclusion in both the Board Policy and RFP include:

The grant of naming rights by the District must not impact, restrict, or limit the Board’s ability to purchase, sell or trade property and award contracts in the best interests of the District according to the Public School Code.

The person or entity for whom a facility is named should satisfy criteria established by the Board of Education to assure that the name will lend dignity and status to the school or facility.

The Board must reserve the right to change the name of any facility if the individual or principals of any entity for whom it is named is convicted of a crime or otherwise falls into disrepute to the extent that it brings disgrace upon the School District as determined in the sole discretion of the Board of Education.

A list of the facilities and/or components available for naming rights should be included with the RFP, and the name for all facilities or components of facilities must be approved by the Board by a majority vote.

In all cases of naming a facility or component thereof, placement of a plaque or dedication ceremonies must be pre-approved by the Board.

As a general guideline, the naming of an existing or new facility or component or substantial renovation to a facility should require a minimum contribution of a designated percentage of the estimated value of the facility, component or renovation as determined by the Board. Naming rights to components of facilities should require the benefactor to contribute a predetermined portion of the estimated value of the component. All estimated values must be determined, confirmed, and pre-approved by the Board of Education.

Corporate and/or other business entities approved for naming rights for any facility shall be in effect for only a specific term of years, such as a maximum period of ten (10) years, unless said entity is liquidated, dissolved and/or merged with another entity within the time period, in which event the entity will forfeit its naming rights. As an option, the entity could maintain naming rights for five additional years at an additional cost to be determined by the Board.

The above criteria places everyone on notice that the Board of Education reserves the right to decline any and all RFPs and will not be bound to name a facility and/or component of a facility after any proposed sponsor based solely upon the monetary consideration offered. Rather, the Board of Education must reserve the discretionary right in the selection of the name for the facilities, to determine whether the name will reflect honor, integrity, and dignity upon the school or facility. Although an excluded applicant may attempt to challenge the Board’s discretion, the existence of a specific policy will help insulate the District from First Amendment challenges.

Our attorneys are prepared to assist your District in the preparation of Board Policy or RFPs to protect the District’s interests while pursuing facility naming rights sponsors.